Inclusion of Future Dispute Clause: While entering into export contract, suitable arbitration clause for referring the future disputes indicating the name of arbitrator, venue of arbitration and applicability of law may be incorporated to protect mutual interests. In case the arbitration clause is not included in the export contract, originally, a subsequent written agreement may be entered into, referring to the earlier contract. The later agreement is called ‘Submission agreement’.

Law for Enforcement of Foreign Awards in India

India is a party to International Conventions. Countries, which are members to the International Conventions, have to pass the necessary legislation for enforcement. Accordingly, Foreign Awards (Recognition and Enforcement) Act, 1961 has been passed.

Procedure for Enforcement in India:  Any person interested in the award can pray the court, having jurisdiction, for filing the award. After giving notice to the parties why the award should not be filed, court pronounces the judgment according to the award, if the court is satisfied that the foreign award is enforceable under the above Act. Upon the judgment so pronounced, decree shall follow. No appeal can lie except when the judgment is in excess or not in accordance with the award.

Enforcement of Indian Awards in Foreign Countries

It is understood that awards made in India are enforceable in Foreign Countries, similarly, if the other country is a member of International Conventions. Where the other country is not a member of the International conventions or does not adhere to similar international regulations, enforcement of arbitration is beset with more difficulties.

  • Clean B/L: It indicates a clean receipt. In other words, it implies that there has been no defect in the apparent order or condition of goods at the time of receipt or shipment of goods by the shipping
  • Claused or Dirty B/L: It shows that the B/L is qualified which expressly declares a defective condition of The clause may state “bale number 5 hook-damaged” or “package number 10 broken”. By superimposing this type of clause, the shipping company is limiting its responsibility at the time of delivery of goods, at the destination. It is very important to note that bank accepts only a clean B/L at the time of negotiation.

(5)) Transshipment or Through B/L: When the journey covers several modes of transport from the place of starting to the place of destination, this type of B/L is taken. It indicates that transshipment would be en route. For example, part of the journey is by ship and the rest of journey may be by road, rail and air.

  • Stale B/L: According to international commercial practice, B/L along with other documents must be presented to the bank not later than twenty one days of the date of shipment as given in the B/L. In some cases, the importer may indicate the number of days within which the documents are to be presented from the date of Exporter has to comply with the stipulation indicated. Otherwise, the B/L becomes stale and is not accepted by the bank for payment. A stale bill is one which is tendered to the presenting bank so late a date that it is impossible for the bank to dispatch to the consignee’s place, in time, before the goods arrive at the destination port. In other words, bank finds it impossible to see the documents reach before the ship reaches the destination.
  • To Order B/L: In  this  case,  the  B/L  is  issued  to  the  order  of  a  specified
  • Charter Party B/L: It covers shipment on a chartered
  • Freight paid B/L: When the shipper pays the freight, then this type of B/L is issued with the words “Freight paid”.
  • Freight Collect B/L: When the freight on the B/L is not paid and to be collected at the point of destination, it is marked “Freight Collect” and this B/L is known as “Freight Collect B/L”.

Generally, the importer insists on the “clean on-board shipped” bill of lading with the prohibition of transshipment of goods as goods can suffer damage during transshipment. If transshipment is allowed, even period of journey may take longer.

B/L is a non-negotiable document: A bill of lading is not a negotiable document while it is a transferable document. Transferability enables the exporter to claim payment from the bank even before the goods reach the destination. Similarly, it enables the importer to sell the goods even before they reach the destination.

Parties mentioned in B/L: There are three main columns in B/L. These are shipper (consignor), consignee or order of and notifying party. Notifying party is party to whom notice is to be sent on the arrival of goods at the place of destination. When the B/L is made to the order of, the person, in whose name it is made to the order of, has the right to endorse further. To illustrate:

Consignor: Cherry & Co, Bhopal

Consignee or to the order of: Dimpy & Co, Newjersey, U.S.A. Notifying Bank: Bank of America, Newjersey

In this case, Dimpy & co has the total right for the cargo as the consignee. So, Cherry & Co can not transfer title to the goods to the third party. If payment of the goods is not received, consignor loses title to the goods and so B/L is not to be made in this way. However, where advance payment has been received or goods are shipped under irrevocable letter of credit, bill of lading can be made in the name of the consignee. In the normal circumstances, exporter takes the bill of lading to his order and endorses to the bank at the time of negotiation and in this way his interests are fully protected.

Who can lodge claim: B/L is the only evidence to  file  claim  against  the  shipping company in the event of non-delivery, defective delivery or short delivery. If  the  importer makes payment, he can lodge the claim,  as  he  will  be  in  possession  of  negotiable  copy  of B/L. Otherwise, exporter can lodge the claim and receive the value of goods.

Contents of B/L

  1. Name and address of the vessle
  2. Name and  address  of  the  shipper
  3. Name of  port  of  loading
  4. Date of  loading  of  goods
  5. Name of port  of  discharge  and  place  of  delivery
  6. Quantity, quality, marks and other description
  7. Number of packages
  8. Freight paid or payable
  9. Number of originals
  10. Name of the  shipping
  11. Voyage number  and  date
  12. Signature of the issuing authority



Importance to the Exporter

  1. It is an acknowledgment from the shipping company that the goods have been received for the purpose of shipment
  2. After receipt of  B/L,  it  helps  him  to  send  the  shipping  advice  to  the
  3. If any damage occurs to the cargo during transit, he can hold the shipping company responsible, if he has received clean bill of
  4. A copy of bill of lading is required to be attached to the application form to claim the incentives
  5. It is a contract of carriage between the exporter (shipper) and the shipping

Importance to the Importer

  1. It is a document of title to the goods, which enables him to transfer the tittle by endorsement and
  2. The exporter can send a non-negotiable copy of B/L as advance intimation of shipment to the

3 It enables him to pay the freight amount as the B/L contains freight details.

Importance to the Shipping Company

  1. It helps the shipping company to collect the freight amount from the exporter (CIF contract) or importer (FOB contract).
  2. Shipping company can protect itself from the wrongful claims of exporter/importer by incorporating condition of goods/packaging, at the time of In case the shipping company, inadvertantly, omits to mention the  advesrse  conditon,  at  the time of receipt, advantage can be claimed by exporter/importer, by submitting wrongful claim.

(ii)     Airway Bill

Airway Bill is also called Air consignment Note. It is a receipt issued by an airline for the carriage of goods. As each shipping company has its own Bill of Lading, so each airline has its own airway bill.

Airway Bill or Air consignment note is not treated as a document of title to goods and is not issued in negotiable form. Delivery of the goods is made to the consignee without the production of airway bill.

Importance of Airway Bill

  1. It is a contract of carriage of goods between the consignor and airlines or his
  2. It acts as a customs declaration
  3. It contains details of freight and so works as a freight

(iii)     Bill of Entry

Bill of Entry is a declaration form made by the importer or his clearing agent in the prescribed form  under  Bill  of  Entry  Regulations,  1971  on  the  strength  of  which  clearance of imported goods can be made.



When goods are imported into a country, customs duty has to be paid by the importer. For this purpose, importer prepares the Bill of Entry declaring the value of goods, quantity and description. This is prepared in triplicate. Customs authorities may ask the importer to produce the invoice of the exporter, broker’s note and insurance policy to satisfy about the correctness of value of goods declared.

For the  purpose  of  giving  information,  goods  are  classified  into  three  categories.

  • Free Goods: These goods  are  not  subjected  to  any  customs
  • Goods for  Home  Consumption:  These  goods  are  imported  for  self-consumption.
  • Bonded Goods: Where goods are subject to customs  duty,  till  duty  is  paid,  goods are kept in

Contents of Bill of Entry

  1. Name and  address  of
  2. Name and  address  of
  3. Import licence
  4. Name of port where goods are to be
  5. Desription of
  6. Value of
  7. Rate and value of import duty


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